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Europe, economic outlook to take center stage on Wall St
23 Jun 2012, 03:22 AM
Wall Street navigated some potent obstacles this week, like Greece's elections and the Federal Reserve's slashing its US economic growth forecasts, but the drama is not over.

Investors say big gains will be hard to come by amid signs of slowing growth and economic headwinds from the euro zone.

The S&P 500 posted its second-biggest daily decline of the year this week. Trading is likely to be volatile in the final week of the quarter as headlines from Europe drive sentiment.

The market also is awaiting a US Supreme Court ruling on the Obama administration's healthcare overhaul, and there are certain to be winners and losers in the healthcare sector, depending on how the justices decide.

European Union leaders will begin a two-day meeting on long-term plans for fiscal and banking union on Thursday.

Italian Prime Minister Mario Monti said the euro zone countries faced "escalating speculative attacks" unless a lasting solution to Europe's financial crisis is found at the summit.

Spain's bond yields have been steadily rising, and investors urged a faster pace by European leaders toward greater fiscal union and helping the peripheral economies.

"We're starting to run up against Spain and Italy having trouble financing - Spain for sure," said John Mauldin, president of Millennium Wave Investments, an investment advisory firm in Dallas. "Europe is up against that moment when it has to do something."

David Joy, who helps oversee $571 billion as chief market strategist at Ameriprise Financial in Boston, said the overseas issues "are things over which we have no control ... makes this time particularly challenging."

For the week, the Dow lost 0.9% and the S&P 500 fell 0.6%. But the Nasdaq was up 0.7%.

Despite the S&P 500's weekly loss, signs of market resilience exist. The CBOE Volatility index, a measure of investor anxiety, has fallen for the past three weeks, dropping about 30%. The S&P 500 is up 1.5% so far this
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